STRENGTHENING INTERNAL CAPACITY AND GOVERNANCE FOR ESG IMPLEMENTATION IN BPJS KETENAGAKERJAAN

Abstract

The growing importance of Environmental, Social, and Governance (ESG) principles has reshaped not only investment strategies but also the internal governance and organizational structures of institutions. While existing literature predominantly focuses on ESG’s impact on financial performance and risk mitigation, limited attention has been given to the internal institutional conditions that determine successful ESG implementation, particularly in public sector entities. This study addresses this gap by examining ESG implementation in BPJS Ketenagakerjaan through the lens of institutional readiness, governance structures, and organizational capacity. Using a qualitative case study approach supported by compliance analysis and benchmarking against global best practices, this research evaluates ESG implementation beyond regulatory alignment. The findings reveal that ESG adoption remains at an early stage, characterized by fragmented governance structures, lack of strategic alignment, limited data integration, and insufficient internal capacity. The study argues that ESG challenges in public institutions are not primarily driven by regulatory gaps, but by internal structural limitations. This research contributes to the literature by proposing an institutional ESG readiness framework that emphasizes governance, organizational alignment, and capability as key determinants of ESG success. The findings offer practical insights for policymakers and institutional leaders seeking to transition from ESG compliance toward full institutionalization.